SUMMARY: so, got your attention with the top headline? Here’s former PACOM Adm. Tim Keating to us just now: “High stakes poker here, perhaps very high. Our government needs to develop a strategy and do so quickly.”

Here’s the risk: taken literally, Hainan island authorities have been given the power to intercept foreign vessels in waters China claims, some of which remain in major regional dispute, and all of which are used by virtually the entire world commercial fleet, backed-up the US, Japanese, Australian, Vietnamese, Taiwanese, Philippine and most other regional navies.

It’s difficult to believe that the senior Leadership in Beijing has thought this through except in the most narrow tactical sense, since surely the rising Xi Jinping government does not seek a strategic crisis with the United States and its allies in Asia.

Unless, of course, they have managed to convince themselves of “American decline” and that President Obama will back down in the face of firm, if unilateral PRC sovereignty declarations? Somehow we have to think no one at the top is that stupid, despite China’s recent “successes” in bullying Vietnam, the Philippines and Japan (if at the cost of reaffirming every US alliance in Asia…)

At State today, briefer Nuland: “We are going to be asking some questions of the Chinese Government about this, frankly, to get a better understanding of what they intend.”(See full “China” section, below).

It didn’t come up at the White House brief, the scribblers fixating on the Obama-Romney lunch (no hot tid bits emerged) the Fiscal Cliff (ditto) and Susan Rice’s sinking candidacy for State.

As State’s Nuland hints, so many vital questions arise from the Chinese announcement, with virtually no answers currently available…although senior working-level “Track 1.5″ meetings in Beijing next week will seek to supplement any USG querries and probe Chinese thinking, intentions, and risk awareness. And Sen. Jim Webb is spearheading a Resolution which should come up shortly…a debate which should further illuminate US concerns.

First, if implemented the risk of incidents blowing-up into a potential strategic crisis seems unavoidable; second, the US must react immediately and firmly, right now, to put Beijing on notice that the risks to regional and world stability seemingly inherent in the policy, as announced, cannot be allowed to stand; third, as it has for 175 years, the US Navy stands ready to protect freedom of navigation and will, without hesitation, be ordered to respond to situations arising from this policy.

Details and quotes, below, but here’s a quick one summing up the tactical consensus from Manning: “I think the Chinese are step-by-step pushing things to the point of no return – or until they create a fait accompli.”

THE HAINAN ISLAND CRISIS RISK…First, the apparent facts, noted by Reuters and seemingly confirmed by the Chinese Foreign Ministry:

New rules, which come into effect on January 1, will allow Hainan police to board and seize control of foreign ships which “illegally enter” Chinese waters and order them to change course or stop sailing, the official China Daily reported.

“Activities such as entering the island province’s waters without permission, damaging coastal defense facilities and engaging in publicity that threatens national security are illegal,” the English-language newspaper said. “If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communication systems, under the revised regulations,” it added.

Hainan…is the province responsible for administering the country’s extensive claims to the myriad islets and atolls in the South China Sea….China has said in the past it will respect freedom of navigation in the South China Sea and that it has no intention of trying to restrict access to the area’s vital shipping lanes for legitimate vessels.

Chinese Foreign Ministry spokesman Hong Lei said his government, which says it will brook no outside interference in its sovereignty claims, was perfectly within its rights in allowing police to board vessels in the South China Sea. “Management of the seas according to the law is a sovereign nation’s legitimate right,” he told a daily news briefing.

China’s assertion of sovereignty over the stretch of water off its south coast and to the east of mainland Southeast Asia has set it directly against Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to parts…The China Daily said that the government will also send new maritime surveillance ships to join the fleet responsible for patrolling the South China Sea.

QUESTION: China? There are reports out of China that Hainan will (inaudible) allow police to board foreign vessels that cross through the disputed territory in the South China Sea. I’m just wondering if you’re aware of those and if you’ve had any contacts with Philippines, Vietnam, other ASEANs about this particular development. It sounds like it could complicate things.

MS. NULAND: Well, we’ve seen the same press reports that you have seen. We are going to be asking some questions of the Chinese Government about this, frankly, to get a better understanding of what they intend. So until we have a chance to do that, I think we’ll withhold comment given that it’s just press reporting at this stage.

QUESTION: Okay. And have – you don’t – do you know if any of the ASEANs have approached you with concerns about that?

MS. NULAND: To my knowledge, we have not yet had those conversations with the ASEANs. I think this broke overnight, but, yeah.

QUESTION: On the passport issue? …have they given you a satisfactory response on the passport map, or did they just tell you to mind your own business, we don’t tell you to put – what to put in your passports, don’t tell us what we can put in ours?

MS. NULAND: Well, let me just say that this has been raised now a couple of times with the Chinese Government, yesterday, by – at the Deputy Assistant Secretary level, and today at the level of Assistant Secretary Campbell, along the lines of the points that we’ve been making publicly. Obviously, I think you may have seen the Chinese Ministry of Foreign Affairs had its own comment yesterday on this as well. I’m going to let the Chinese side speak for itself, but we’re obviously joining the chorus of countries who are urging the Chinese to reconsider the political signal that this appears to send.

QUESTION: So suffice it to say, without getting into what their response is, your concerns have not been assuaged?

MS. NULAND: Correct…

QUESTION: As far as the new leadership in China is concerned, do you see any changes as far as the Chinese behavior in the South China Sea
and also as far as the Tibetans? They are still asking U.S. and UN help. He – the Dalai Lama spoke the other day that his people need help now, so – because they are putting themselves more and more on fire every day.

MS. NULAND: Well, as you know, the Chinese announced the new leadership sort of less than a week ago. We had a chance, at the level of the President, to see Wen Jiabao in Cambodia, and there was a – as the readout of that made clear, there was a concerted effort on the Chinese part to talk about continuity. But obviously they have – we will see how we go forward.

With regard to the immolations in Tibet, we obviously make those points as often as we can, and we have been concerned about the accelerating level of these and continue to raise it with the Chinese side.

QUESTION: And one more: There’s escalation between China and now Philippines. The Chinese are claiming the territory from Philippines and also now Japan is also worried about the rise of China and what the new leadership will be there. Are you discussing all these things, what China is claiming the territories, including a territory part of India?

MS. NULAND: Well, as I said, we have been raising this passport issue over the last couple of days. It obviously applies not only to the South China Sea, but the Indian side has expressed concerns about some of their territory being chopped into this map. So the conversation is about all of it…

QUESTION: And this is kind of a technical and procedural thing, but if you said that yesterday the Deputy Assistant Secretary spoke to the Chinese about it, and then today the Assistant Secretary spoke about it – I mean, was there a reason that this is going up the chain?…Are your concerns greater today than they were yesterday, and so you had someone more senior bring it up with them? Or is this just a reflection of scheduling?

MS. NULAND: It’s more scheduling that the meeting at the Kurt Campbell level was going to be today. But we didn’t want to wait in terms of raising it, so we had another opportunity yesterday to start it, start the conversation.

QUESTION: And can I – and that was here in this building?
MS. NULAND: Yes.

QUESTION: Did any of countries of Asia have approached you on this issue?

MS. NULAND: Lalit, I don’t know the answer to that. They’ve obviously been very clear publicly about where they stand. And we’ve been talking to them in capitals. But I don’t think in terms of asking us to do anything with the Chinese, I don’t think so. But obviously we have concerns if they have concerns.

QUESTION: And given the kind of response you have seen from the countries in the region, do you see – do you visualize increase in tension between China and these countries?

MS. NULAND: Well, I spoke yesterday about the concern that we have, that this raises tensions. So that’s the context in which we’re bringing it up with the Chinese.

-0-

LOYAL READER DISCUSSION…Hummm….where to begin, where to begin…as you can see from the above, the Hainan island directive opens up a host of “sensitive” issues which surely Beijing cannot welcome. Anyhow, let’s do this in order of responses received.

Here’s the question/comment Your Editor sent out to relevant Loyal Readers: Major incident risk if they DO this. Is it a bluff to ‘suss us out, or…?

BONNIE GLASER, CSIS:

Chris,

Not a bluff. The Chinese are quite serious about defending their territory. They are building on what they see as a string of successes in Scarborough Shoal and the Senkakus/Diaoyu dispute. I think the Chinese calculate that over time the region-certainly the small neighbors-will accommodate to China and compromise on these disputes. Compared to the expanding Chinese tool box that is being used to advance their interests, it seems to me that the US has very few options. We can use rhetoric (champion international law and peaceful resolution of disputes) or sail in the 7th fleet. It will be interesting to see how the Vietnamese react. They don’t roll over easily.

Bonnie

ADM. MIKE McDevitt, C N A:

Chris-

I share Bonnie’s view that this is not a bluff. The real issue in my judgment is how they elect to define Chinese “territory” in the SCS. Over the past few months Beijing ( or at least the Foreign Ministry) has been careful to say the nine-dashed line does not indicate a claim to sovereignty over the that part of the SCS within the that line. In other words it is not a claim to all the water.

If my assumption is true then they are probably speaking about EEZ’s; which only involve sovereignty over resources respect not incent passage etc. So what we may be talking about is nothing very different than today’s practice of periodically rounding up fishermen in what China’s considers its EEZ or territorial waters.

I can’t imagine they are talking about commercial traffic along normal international sea lanes. In fact they have been at pains to point out that despite US accusations, they do NOT hinder “freedom of navigation ” for commercial shipping. (They do want to hinder “freedom of navigation” for USN ships in their EEZ, but that is not what this about.)

Mike

ADM. TIM KEATING, PACOM (RET.)

As usual, Bonnie has this right I think.

High stakes poker here, perhaps very high. Our government needs to develop a strategy and do so quickly. Options that should be considered include going it alone in South China Sea, continuing to develop a coalition, determining degree to which we (either alone or with coalition) are willing to flex military muscles (mostly but not entirely naval), deciding on a reasonable end state, calculating a wide range of likely/potential Chinese reactions, and executing this strategy rapidly and resolutely.

This strategy needn’t be extraordinarily sophisticated, nuanced, complex. I think the 80-90% solution, sooner than later, is vastly preferable to a gold-plated, agonizingly vetted/discussed/chopped/briefed proposal. This is a dynamic region, bigger in size than most appreciate, and the players have similar but not identical interests at stake. Whatever we decide to do will need adjustments over time.

We need to get busy.

All the best, Tim

-0-

ABOUT NEXT WEEK’S “TRACK 1.5″…led by the C N A team (formerly Center for Naval Analysis) and the ADM folks, questions were solicited from the above respondents to be posed to Chinese counterparts.

GLASER:

I like to ask the Chinese how they assess the costs and benefits of their actions toward SCS claimants and Japan. If they still require a peaceful regional/international environment, then why put that at risk? My guess is that they are confident that through application of carrots and sticks, they predict they can gain advantage.

And they can convince the regional states that the US either won’t sustain its commitments and attention or will the US simply not be able/willing to ride to the rescue? I would probe them on how they see this playing out over the next 5-10 years.

McDEVITT:

A couple of questions come to mind. First, “we keep hearing unofficial comments that your government is going to clarify what the so-called nine-dashed line means legally. I think we all understand that it has no basis under the UNCLOS treaty. Can you address the policy issues China is wrestling with regarding the meaning of the line, and when will your government publicly inform the rest of the world? ”

A second question might be: “Can you be specific about what waters in the SCS that the Hainan authorities are going police? Are they going to operate south of the Paracel’s? If so how are you going to differentiate between Vietnamese, Philippine and Chinese waters, since respective EEZ’s have yet to be demarcated.”

By the why, by drawing a baseline around the Paracel’s and S/D China is violating UNCLOS. Only archipelagic states are allow to draw starlight baseline around island groupings. That is why the US does NOT draw baselines around the Hawaiian Islands for example.

GLASER:

Mike,

Your assumption is that China is going to justify its claims solely on UNCLOS-that they will define which land features are islands and generate a 200 mile EEZ. I think that is highly unlikely. The Chinese are not going to give up their position on “historic rights.” They are convinced that “historic rights” have a place in international law.

McDEVITT:

Bonnie–True enough but by framing the issues using UNCLOS it ought to force them to try and rationalize a historic waters case that exists outside of UNCLOS-in fact I am sure that is why the is an on-going debate within China over how to clarify the nine-dashed line. Trying to have your cake and eat it to, AND stay with the UNCLOS framework is tough.

MANNING:

For starters, ask the questions Mike raised: if not the 9-dash line, how do they define Chinese territory? I recall at a press conference during the last S&ED, FM Yang said unambiguously that all territory in the S. China Sea was “under Chinese sovereignty”.

Do they see the ASEAN’s simply acquiescing over time to what may be a de facto Chinese Monroe Doctrine? (Ask them about the new passports? They seem to be following something of an Israeli model: creating facts on the ground that make it increasingly difficult to roll things back.)

Also worth asking about their attempt to redefine UNCLOS to give them the right to grant permission to ships in their EEZ (I assume they include disputed territory as projecting out EEZ’s…)

JIM PRZYSTUP, NDU:

Chris, Can’t agree more with Mike’s comments — where are they going to draw the line and against what kind of shipping. If this authority takes in all the area under the 9-dash line — they will have clearly demonstrated where the threat resides and undercut efforts to appear as reasonable members of the Asian DOC/COC community.

At the same time, I wonder: have the guys in Zhongnanhai actually signed off on this?

SOURABH GUPTA, SIA

There might actually be some good coming out of all these new rules. Will give us all a glimpse as to which part/s of the SCS Beijing chooses to enforce in its normal course of activity…and so should give clarity about how it interprets its nine-dashed line on the ground, as it were.

Actions, not words or questions, are best gauge of Beijing’s behavior.

We had people previously fly off the handle here in late-September when word spread that Beijing had readied regulations to expel foreign vessels in disputed East China Sea waters (Senkakus). Well, they’ve expelled NOBODY.

BUT they have used such authority to make ‘operational assertions’ in 12nm territorial sea around the Senkakus from time to time. Remains to be seen if they are planning to pull off this same stunt in the SCS too.

Insofar as boarding/inspecting in EEZ as a violation of freedom of navigation rights, that’s not automatically the case. If they have probable cause it’s ok to do so; even hot pursuit is allowed – it’s in compliance with UNCLOS and EEZ rights.

But of course basic good judgment suggest that this is best not done in disputed EEZs (and certainly not in foreign EEZs)…so it’s understandable why the Hainan announcement really needs to be jumped on and “clarified” by not just the US, but all the potentially affected governments.

-0-

CHINESE POLICE PLAN TO BOARD VESSELS IN DISPUTED SEAS. Reuters reports police in the Chinese island province of Hainan will board and search ships which illegally enter what China considers its territory in the disputed South China Sea, a move likely to add to tensions. From the piece: “New rules, which come into effect on January 1, will allow Hainan police to board and seize control of foreign ships which ‘illegally enter’ Chinese waters and order them to change course or stop sailing, the official China Daily reported. ‘Activities such as entering the island province’s waters without permission, damaging coastal defense facilities and engaging in publicity that threatens national security are illegal,’ the English-language newspaper said. ‘If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communication systems, under the revised regulations,’ it added… The Philippines, which also has claims to parts of the South China Sea, said the move could violate international maritime laws allowing the right of passage and accused Beijing of trying to escalate tension in the area.”

U.S. NOT NEUTRAL IN ISLAND DISPUTE, ARMITAGE TOLD BEIJING. According to the WSJ, the U.S. isn’t saying who it thinks has legal sovereignty over islands disputed by Japan and China in the East China Sea, but don’t mistake that stand for neutrality, says former Deputy Secretary of State Richard Armitage. From the piece: “Mr. Armitage traveled with a delegation of ex-U.S. officials to both countries in late October at the behest of the State Department to convey U.S. concerns about the way the dispute had flared up. ‘We’re not neutral when our ally is a victim of coercion or aggression or intimidation,’ said Mr. Armitage in an interview, referring to Japan.”

U.S. ‘WELCOMES’ CHINA PARTICIPATION IN NAVAL DRILLS. According to AFP, the U.S. welcomes China’s participation in next year’s Rim of the Pacific U.S.-led joint naval exercise. From the piece: “Some 22 nations and more than 40 vessels took part in the latest round of the international maritime exercises, described by the U.S. Navy as the world’s largest, which took place from June 29 to August 3 around the Hawaiian Islands. The U.S. invitation comes as Washington tries to reassure Beijing over its strategic ‘pivot’ to the Pacific and China’s growing assertiveness in territorial disputes with several Asian neighbors. ‘Cooperating with China to realize shared goals is important to the maintenance of peace and security in the Asia-Pacific region and central to our approach,’ Mabus said.”